Fenner slumps as it issues another profit warning

Fenner said results for the current financial year are likely to miss its previous expectations, as it swung to a loss in the year to the end of August amid difficult trading conditions.

The maker of reinforced polymer technology swung to a pre-tax loss of £5.3m, compared with a profit of £29.2m in 2014, as revenue dropped to £666.7m from £729.4m.

Underlying pre-tax profit slid to £42.5m from £65.6m.

Fenner will pay a final dividend of 8p per share, unchanged from last year, leaving the total dividend at 12p.

Chief executive officer Nicholas Hobson said: "In the financial year to 31 August 2015, the Group has faced difficult trading conditions in some of its key markets. We have responded by rigorous control of costs and the close management of cash and working capital, whilst still maintaining our ability to resume growth when market conditions allow.”

The company said that as a result of the recent further deterioration in the US coal industry, it is likely to achieve an outcome for the current financial year which is moderately below its previous expectations.

Fenner had already issued a profit warning in July on the back of a slowdown in spending in the coal mining industry.

Investec said it expects full year 2016 consensus to be reduced by around 10% following the profit warning, adding that it still sees risk to the dividend.

“Fenner has faced deteriorating markets for the last two years and the momentum is still downwards. The FY15 results were close enough to much-reduced expectations, but the outlook still requires a ‘moderate’ downward adjustment to guidance,” it said, reiterating its ‘sell’ recommendation.

At 1030 GMT, Fenner shares were down 6.6% at 143.77p.